PetroNeft Resources plc (LON:PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 90% owner and operator of Licences 67 and 50% owner and operator of Licence 61, has reported its final results for the year ended 31st December 2020.
· New leadership, combined with strong local support, continues to demonstrate significant technical, operational and financial progress in 2020.
· Despite external adverse factors including closing down production in April 2020 due to oil price, gross 2020 production averaged 1,562 bopd down only 3.2% year on year (1,614 bopd 2019).
· Operating costs per barrel reduced by 10.3% (cost of sales excluding depreciation and Mineral Extraction Tax) at US$12.39 per barrel (2019: US$13.82 per barrel).
· Loss for the year US$4.54M (2020) reduced from US$6.04M (2019) despite 32.7% fall in realized oil price per barrel.
· Due to the COVID-19 pandemic, the Company intends to publish later the notice for the Annual General Meeting in order to increase the chances of shareholders to be able to physically attend.
· Gross production currently 2,289 bopd.
· Improved oil prices have translated into higher netbacks in 2021 to date.
· Closing of successful acquisition of additional 40% interest in Licence 67 (PTR working interest 90% post acquisition) ahead of rapid transition from an Exploration to a producing asset Q1 2021.
· Significant strengthening of the Company’ Capital Structure as evidenced by the following key indicators.
o Successful Convertible Debt raise at substantial premium to market price of US2.9M and later retiring US2.86M Convertible Debt through conversion.
o Increased equity holding in Licence 67 to 90% from 50%, funded through equity issue combined with a US$1.7M loan advanced by the seller Sarum Energy Limited.
o The strong operational performance, combined with the improving oil price, has significantly improved the finances of the Company which has enabled the Company to fund construction of the all-season road and re-entry of the Ledovoye L-2a well without the need to call down agreed financing arrangements with Alexandrovskoye Refinery. This $1M facility remains in place, should we decide to utilize.
David Sturt, Chief Executive Officer of PetroNeft Resources plc, commented
“In 2019 we laid the crucial foundations for the survival and future growth of the company which enabled us to meet the enormous challenges caused by the 2020 combination of the Covid pandemic and the precipitous fall in the price of oil.
Following continued operational improvements, the latent potential that are the oil fields in both licenses 61 and 67 are now starting to see the true extent of the opportunity available to PetroNeft. By continuing to improve our understanding of the company’s assets we are continually identifying low risk growth opportunities whilst also maintaining our focus on operational efficiencies. The Company is ideally placed to extract the significant value proposition that PetroNeft Resources represents.
Moving into 2021, there is renewed global optimism in our sector. Due to the steps taken in 2019 and 2020 combined with the dedication of our staff and support of our stakeholders we are well placed to continue to develop the company and the true value of the assets.”